EU Commission President Juncker weighed in: the Commission sees CETA, the trade deal with Canada, as falling under “exclusive” EU competence and thus not requiring ratification by national parliaments. This is causing consternation in Berlin, though there are differences in point of view between Chancellor Angela Merkel’s CDU party and that of her economy minister and coalition partner Sigmar Gabriel, the SPD.
On Wednesday evening, Juncker said the Commission will submit CETA for approval to the Council next week with the view that it is of the exclusive remit of the EU. The debate over CETA is a “fake debate” (Scheindebatte). No member states have objections to CETA’s contents after he asked all individual heads of state and government, he said. He further said he personally felt “fully indifferent” (schnurzegal) about the issue, but that this was, in his views, strictly a legal matter.
Averting vetos
The Commission is trying to reverse a trend initiated with the EU Korea free trade agreement of 2011 that trade agreements be considered as falling under the legal competence of both the EU and the member states, and thus requiring ratification not only by the member states (the Council) in Brussels, and the European Parliament, but also national parliaments.
Critics of this state of affairs bemoan a ‘re-nationalisation’ of what has been one of the EU’s most effective common policies, and the multiplication of veto opportunities for minorities and the unhappy. Commissioner Malmström said early June that if member states went down the road of “following every populist movement, we can close the shop”.
The risk that a deal like CETA which trade experts, business, and many political leaders hail as of top quality, be derailed, appears real. A consultative referendum in the Netherlands in March 2016 on the EU Ukraine Association Agreement has put the spotlight on new veto powers by 27 member states. Shortly after the Dutch vote, Romania and Bulgaria threatened not to ratify CETA if they don’t obtain satisfaction with Canada on a separate visa issue.
Not fool proof
Juncker’s legal views are not fool proof. The EU Commission’s legal service reportedly considers that some – though a very small number of – areas of CETA also fall under member state remit. This is consistent with the Lisbon Treaty which states that international treaties that touch upon policy areas in which national governments maintain fully or partly their sovereignty – such as audiovisual policies, or energy policy, or labour protection – should also be ratified by the 28 member states. This is the case of CETA.
Alberto Alemanno, Professor of law at HEC business school near Paris told Borderlex the he had “expected – due to the nature and contents of the agreement – that the EU Commission would have recommended CETA as a mixed agreement”.
Italy’s position breaks the unanimity that is required for member states in the Council to overturn the Commission’s view on the mixity of an agreement. In recent years, the Council has always decided unanimously that trade deals are of mixed nature. There are signs the powerful BMWI – the economics ministry in Berlin – could try to manoeuvre differently by garnering a qualified majority vote in the Council (which does not require anonymity) to bloc CETA. Other powerful countries like France share Berlin’s view that CETA is a mixed agreement.
German economics minister Sigmar Gabriel said the Commission is acting in an “incredibly foolish” (unglaublich töricht) way, saying that this will stir all sorts of conspiracy theories about other free trade agreements notably the controversial transatlantic TTIP, which could “explode” [sic] as a result.
Sigmar Gabriel – from the centre left SPD – is more outspoken than Angela Merkel, from the centre right CDU, according to German press reports. Merkel believes it is desirable to involve national parliaments, especially in view of the potential need to pass TTIP in future, the big elephant in the room in the whole affair, given CETA’s de facto status as a first step to TTIP.
Yet Herbert Reul, the head of the CDU group in the European Parliament has recently said that trade agreements could be “discussed to death” (zerredet). “If the EU does not act alone, CETA will fail”, Reul said. Juncker is obviously betting on support by Merkel’s ruling party, while Sigmar Gabriel is outspoken due to coming general elections in Germany ahead of which his centre-left party prospects are far from good.
Formally, whether CETA bypasses national parliaments doesn’t mean it won’t be adopted democratically, given that the European Parliament would ratify it, and it would be adopted by the Council. Whether this flies in public opinion is another matter.
Also, how the European Parliament will react is yet unclear. This decision could flatter many MEPs instincts to expand the body’s powers, but INTA chief Bernd Lange, also from Gabriel’s party, said national parliaments “need to be included” in the CETA ratification process, be it only for political reasons.
The Commission is clearly taking a bold gamble as it seeks to have CETA agreed at all costs. A real settlement over the issue of mixity of international trade agreements can realistically only be achieved after a European Court of Justice ruling over the mixity of another free trade agreement with Singapore. The ruling is expected in late 2016 or in 2017.
